Count Down to 65

And how to overcome one of the biggest fears

If that magic age of 65 is approaching for you, congratulations! With this milestone birthday, you’ll be eligible for Medicare, and may be planning to retire in the not-too-distant future. You have many things to look forward to, as well as several decisions to make — including a critical one regarding your health insurance choices.

If that makes you a little nervous, you’re not alone. A recent study of people approaching retirement who aren’t yet enrolled in Medicare showed that a leading fear they have about this transition is that they’ll make the wrong choice for their health coverage.

But taking time to learn about your choices can equip you to make the best choice for you. To help you get started, here are a few Medicare basics to think about.

Medicare facts

People new to the topic of Medicare sometimes think it’s free and that it’ll cover all their health care when they retire, but that’s not the case. Here’s a very high-level look at Medicare:

• You’re eligible at age 65, and can sign up without penalty three months before your birthday, the month in which you turn 65, and the three months after your birthday — seven months total. This is your Initial Enrollment Period.
• Part A helps cover hospitalization, and usually has no premiums, so, for most people, it’s a good idea to sign up as soon as you’re eligible. (If you claimed Social Security benefits early, you’ll automatically be enrolled when you turn 65.)
• Part B covers outpatient care, including doctors’ visits. There is a monthly premium. If you’re planning to work past age 65, check with your employer, as well as with Medicare.gov, to see if your employer-sponsored group coverage will be your primary coverage or secondary to Medicare. If your employer-sponsored group coverage will be your primary coverage, you don’t have to sign up for Part B until you stop working and your group insurance ends. If you wait to retire and are covered under your employer-sponsored group coverage, you will be eligible for a Special Enrollment Period (SEP).
• Part C is Medicare Advantage, an alternative to traditional Medicare (see below).
• Part D covers prescription drugs. There’s a monthly premium, and people are generally allowed to switch plans once a year, during Open Enrollment (October 15-December 7).

While Medicare generally covers about 80 percent of your Part B services, it doesn’t cover everything. Many people buy insurance to help supplement the coverage:

• Medicare Supplement insurance (Medigap) helps fill in gaps in the coverage Medicare offers.
  

  >> During your Initial Enrollment Period and Special Enrollment Period,you can’t be excluded from buying a Medigap plan for pre-existing conditions, nor can you be charged a higher premium. As long as you continue the coverage by paying the premiums, your insurance policy is guaranteed renewable for the rest of your life.

  >> But if you want to change Medigap plans after your enrollment periods, insurance companies are allowed to apply medical underwriting. That means you could be charged a higher premium, or excluded altogether. Switching from one Medigap plan to another one may not come with the same coverage or premiums — or may not be possible at all.

• Or, you might consider the alternative to traditional Medicare, Medicare Advantage (Part C). It is offered by private insurers and covers the same services as Medicare, and generally includes prescription drug coverage. If you choose Medicare Advantage, it means you’re opting out of traditional Medicare, which you’ve paid into your whole life.

>> Medicare Advantage plans typically have lower premiums than the Part B/Part D/Medigap combination, but higher co-payments and more restrictions, such as provider networks, and sometimes the need to get a primary care physician’s referral to see a specialist.

>> Medicare Advantage plans aren’t guaranteed renewable, so coverage can be canceled.

As you begin your journey to making the best decision for your medical coverage in retirement, keep in mind:

• There’s a lot to learn — and understand — about Medicare. Give yourself plenty of time to sort through all the information before your Initial Enrollment Period starts.
• Mistakes such as missed enrollment deadlines and incorrect assumptions about coverage can be costly. For example, if you retired before 65 and have retiree coverage from your former employer, find out what happens to that coverage when you become eligible for Medicare: It might not pay your medical costs during any period in which you were eligible for Medicare but didn’t enroll. You’ll likely need to enroll in both Medicare Part A and Part B to get full benefits from your retiree coverage.
• You don’t have to go it alone. A licensed insurance agent who specializes in Medicare can help you understand the program and options, and can help you make the decision that’s right for you. Make sure you work with an agent who takes the time to help you understand all your options.

Don’t forget your dental care

Medicare doesn’t cover dental care, so unless you have this important coverage from another source, you’ll find yourself without it. To preserve the dental health you’ve stayed on top of through your life when you had dental insurance, you’ll want to continue regular checkups. And like medical care, chances are, you might need more care — not less — as you get older.

Health insurance coverage is just one of the many decisions you’ll make about your retirement. But it’s a big one. Making the decision that’s right for you will help you confidently begin the retirement you’ve worked so hard for.